The stock for the Dubai boom: Emirates NBD, Finexity, eToro

Dubai keeps growing

As the Knight Frank Wealth Report 2024 highlights, Dubai ranks among the fastest-growing hubs for high-net-worth individuals. The number of new businesses being set up in Dubai remains high, and the luxury real estate market is seeing double-digit growth rates. Those who live, or at least work in Dubai part-time, value the international and dynamic atmosphere. Encounters with business founders and investors are part of everyday life, fostering networking and idea exchange. At the same time, Dubai is considered safe, clean and diverse. To benefit from the boom in the metropolis, investors previously had to either be on site or buy shares in local companies. The major bank Emirates NBD is a universal bank for private and business customers, offering asset management and Islamic financing. Importantly, Emirates NBD also stands for technological openness, providing solutions in blockchain and crypto.

Invest quickly and securely in Dubai real estate – thanks to Finexity

Without having to venture into distant lands, investors can also secure a piece of the steadily growing "Dubai pie" through a German-listed company. The Hamburg-based company Finexity positions itself as a digital trading platform for tokenized private market investments. Investors can purchase shares in various projects or tangible assets in the form of tokenized securities. The portfolio already includes over 250 listed tokens across different asset classes, such as private equity, private credit, real estate, infrastructure, renewable energy projects, and collectibles. Finexity recently expanded its offering to include Dubai real estate: within just a few weeks, investors will be able to buy regulated participation securities in a luxury villa project in Al Barari via Finexity. Further interesting projects are set to follow, with the aim of making Finexity a bridge between Europe and the Emirates.

Finexity's stock could benefit from current developments for two reasons. Dubai's appeal has remained unbroken for years. At the same time, more and more market participants are becoming aware of the great opportunities offered by tokenized securities. Finexity, which has been active in its field for many years, is perfectly positioned to benefit from this development. McKinsey estimates that the total market for digitized financial assets could reach around USD 2 trillion by 2030. Deloitte predicts an explosion, particularly in the real estate sector: in 2024, the volume was still below USD 0.3 trillion. However, by 2035, USD 4 trillion in real estate assets could be tokenized. The reason for these ambitious forecasts is the many advantages of tokenization: The technology enables proportional ownership of assets and also offers automated processing via so-called smart contracts. This reduces costs and increases transparency compared to traditional securities.

Customers embrace tokenized assets

With its focus on private markets, Finexity occupies a particularly attractive niche. Demand for alternative asset classes such as private equity has been growing steadily, and providers like Finexity make access possible for private investors - effectively democratizing investing. Finexity's competitors, like eToro, on the other hand, primarily focus on tokenized versions of listed stocks. It was only in August that eToro introduced 24/5 trading of US stocks and launched the tokenization of popular US stocks. The globally active platform continues to benefit from these innovations, attracting a growing user base. In the second quarter of this year, assets under administration climbed by a whopping 54% to EUR 17.5 billion. Although the crypto rally is likely to be responsible for this increase, the statistics also highlight the growing popularity of crypto and blockchain in general.

More and more private investors are turning to private markets

While eToro's share price has lost around 42% of its value over the last six months, Finexity's stock market debut has been a success: in its first month of trading on the Munich Stock Exchange, the share price is up 8.6%. This development shows that no existing shareholders cashed out during the listing and that the investment story was well received by the market. The valuation of EUR 55 million is not exactly excessive. Finexity shares stand for innovative financial technology in attractive niche markets. In particular, the recent expansion into Dubai promises to attract further customers. Given the underlying trends around tokenization and private markets, the long-term environment for Finexity is also favorable. As more and more investors seek alternative asset classes in times of rising volatility, the stock fits the spirit of the times.